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Sawyer Furniture is one of the few remaining domestic manufacturers of wood furniture. In the current competitive environment, cost containment is the key to its continued survival. Demand for furniture follows a seasonal demand pattern with increased sales in the summer and fall months, culminating with peak demand in November.

The cost of production is $16 per unit for regular production, $24 for overtime, and $33 for subcontracting. Hiring and firing costs are $500 per worker. Inventory holding costs are $20 per unit per month. There is no beginning inventory. Ten workers are currently employed. Each worker can produce 50 pieces of furniture per month. Overtime cannot exceed regular production. Given the following demand data, use Excel Solver to design an aggregate production plan for Sawyer Furniture that will meet demand at the lowest possible cost.

Input:

Beg. Wkrs

10

Regular

$16

Hiring

$500



Units/wkr

50

Overtime

$24

Firing

$500



Beg. Inv.

0

Subk

$33

Inventory

$20


Month

Demand

Reg

OT

Subk

Inv

#Wkrs

#Hired

#Fired

Jan

500

500

0

0

0

10

0

0

Feb

500

500

0

0

0

10

0

0

Mar

1000

1,000

0

0

0

20

10

0

Apr

1200

1,000

200

0

0

20

0

0

May

2000

1,000

1,000

0

0

20

0

0

Jun

400

400

0

0

0

8

0

12

Jul

400

400

0

0

0

8

0

0

Aug

1000

1,000

0

0

0

20

12

0

Sep

1000

1,000

0

0

0

20

0

0

Oct

1500

1,500

0

0

0

30

10

0

Nov

7000

3,500

3,500

0

0

70

40

0

Dec

500

500

0

0

0

10

0

60

Total

17,000

12,300

4,700

0

0

246

72

72

Marketing Management, Management Studies

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